The international benchmark Brent crude decreased by 0.4%, trading at $81.30 per barrel on Thursday morning.

Oil prices dropped on Thursday following the announcement of a ceasefire agreement between Israel and Hamas, alongside a report indicating increased crude production from the Organization of the Petroleum Exporting Countries (OPEC).

The international benchmark, Brent crude, fell by 0.4%, trading at $81.30 per barrel at 10:32 a.m. local time (0732 GMT), down from $81.61 at the previous session's close.

Meanwhile, the US benchmark, West Texas Intermediate (WTI), dropped by 0.3%, settling at $78.90 per barrel, down from $79.14 at its prior session close.

Qatari Prime Minister and Foreign Minister Mohammed bin Abdulrahman Al-Thani confirmed the ceasefire agreement during a press conference in Doha. The ceasefire, which is set to take effect on Sunday, marks a crucial development in the ongoing conflict. The agreement details an initial 42-day phase, which includes the release of 33 Israeli detainees in exchange for a number of Palestinian prisoners.

This ceasefire comes on the 467th day of Israel’s war on Gaza, a conflict that has resulted in 156,000 Palestinian casualties, the majority of whom are women and children. The announcement of the ceasefire has eased supply concerns in the Middle East, a region home to a significant portion of the world’s oil reserves, leading to a decline in oil prices.

In addition, OPEC’s latest report indicated an increase in crude production, further weighing on prices. According to the organization’s monthly oil market report, OPEC’s output rose by 26,000 barrels per day (bpd), or 0.1%, in December 2024, reaching an average of 26.74 million bpd.

The rise in supply has eased concerns about potential market disruptions, which further contributed to the decline in oil prices. OPEC’s decision to keep its global oil demand growth forecast for 2025 unchanged also placed additional pressure on prices. The group expects oil demand to grow by 1.45 million bpd this year, reaching 105.2 million bpd, a figure lower than previously anticipated, dampening prospects for price increases.